Iron ore futures moved above $99 on restocking ahead of the Chinese holiday.
It was a busy day for iron ore traders as a flurry of trades were transacted as steel mills look to restock ahead of the Dragonboat festival holiday on Thursday and Friday.
Some trade sources are expecting more spot supply of Australian ores in the near term as Australian miners look for a late push before the end of the Australian fiscal year. Further price corrections cannot be ruled out with the availability of Australian spot supply which prompted a sharp backwardation of July cargoes. Overall, the steel industry is showing signs of recovery as economies reopen following the worst slump in a decade.
According to data by World Steel Association, while steelmakers from Japan and India to Europe and the US are still struggling, the drop in production was mitigated by an increase of outputs by China in May.
Seasonal weather, however, is having an impact on Chinese steel demand as heavy rainfalls in different parts of the country in summer is likely to cause delays in many construction activities.
Meanwhile, investors are also assessing risks from pandemic as virus cases soared again in Brazil. The country has surpassed the mark of one million coronavirus confirmed cases and 50,000 deaths.
Futures in Singapore rebounded above $99 today but moved with tight range during London. Aug was seen trading between 99.65 and 99.75 while Jul traded at 99.4.